Your next Xiaomi phone may be more expensive than ever, hints CEO

Xiaomi CEO Lei Jun reportedly said its phones could be about to get more expensive.

The executive said the company may not sell phones under 3,000 yuan (~$447) in the future.

Lei Jun was presumably referring to its flagship Mi series, which starts at 2,999 yuan (~$446).

Xiaomi is renowned for offering arguably the best value for money smartphones in the world, ranging from its ultra-cheap entry-level devices to its affordable flagships. But company CEO Lei Jun has reportedly said that its phones could be more expensive in the near future.

“Actually, we want to get rid of this reputation that our phones cost less than 2,000 yuan (~$298). We want to invest more and make better products,” the CEO said according to a translated video by TechNode.

“I said internally that this might be the last time our price will be under 3,000 yuan (~$447),” Jun reportedly said, presumably referring to the Xiaomi Mi 9. “In the future our phones might get more expensive — not a lot, but a little more expensive.”

The Xiaomi Mi 9 starts at 2,999 yuan (~$446) in China for the 6GB/128GB model. Meanwhile, European users can expect to pay 449 euros (~$509) for the 6GB/64GB base model. The Chinese price is a slight increase over the Xiaomi Mi 8, which started at 2,699 yuan (~$420 at the time). But you are getting more cameras, faster charging, and wireless charging with the new phone.

What about that profit margin?

Xiaomi announced a commitment to stick to a five percent profit margin last year. But as our own Tristan Rayner noted at the time, it’s possible the company doesn’t make anywhere close to a five percent profit margin yet (if it actually makes a profit).

“For another perspective, imagine announcing to your friends you were going to cap your earnings for the year at $1 million, and give them anything you make beyond that. Your friends might get excited before they realize you don’t make close to that amount, probably never will, and they’ll never see a dime,” Tristan said at the time.

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But if Xiaomi is indeed making (and sticking to) a five percent profit margin, there’s nothing stopping it from upping prices if it increases the cost associated with making its phones. That is, it could make more expensive phones with pricier components, and still technically stick to the promised profit margin.

Whether that means sharper displays, better build quality, water resistance, more RAM, and/or more storage remains to be seen. But the CEO’s comment that it wants to build better devices certainly seems to suggest that consumers will receive a benefit of some kind.

The news also comes a few months after Xiaomi turned its Redmi line into a sub-brand. The Redmi series is traditionally known for cut-price mid-range hardware, but it’s unclear whether it would be affected by a Xiaomi price increase. It’s also not clear whether Xiaomi’s other Mi devices (e.g. Mi Mix, Mi Max) will see price bumps as a result.